Shipments to new markets will also aid growth. Operating margin is expected to remain steady at 7.0-7.5% this fiscal and the next, as the benefits from tariff reduction are passed on to customers. Despite potential temporary volatility in working capital requirements, the credit profiles of players will continue to be stable due to low long-term debt. Overall export volume grew 9.5% in the first three quarters of this fiscal, despite a drop of 15% in volume to the US, the largest market for Indian shrimp, amid higher tariffs. As a result, the share of US exports could drop to 32-33% this fiscal from 40% last fiscal, despite frontloading of shipments until August 2025 in anticipation of higher tariffs.
Next fiscal, US sales are expected to reach their previous levels. Free-trade agreements, quick approvals, and improved market access to Russia and the European Union (EU), owing to superior product quality and substantial processing capacities, will facilitate diversification of India’s shrimp industry.
Says Rahul Guha, Senior Director, Crisil Ratings, “Shrimp exports beyond the US have grown in double digits in the first 9 months this fiscal. To wit, volume is up 62%2 to Vietnam, 43% to the EU and in double digits to China. In value terms, growth in exports to these markets has been sharper, with higher tariffs and rupee depreciation translating into better realisations. Next fiscal, export revenue should rise 8-10%, as benefits from announced trade deals with the US and the EU accrue. Geographical diversification and new customers and markets will also support the offtake.”
With limited capacity expansion plans, shrimp processors’ long-term debt additions will remain low. Though credit to new customers and geographies will be monitorable, working capital cycles for shrimp exporters are expected to remain stable. Moreover, with healthy cash generation and limited capex, the addition of debt, short term or long term, is likely to be limited.
Says Himank Sharma, Director, Crisil Ratings, “The credit profiles of shrimp processors should remain stable as demand from the US is expected to pick up from April 2026, once tariffs are lowered. Interest coverage of companies rated by us is expected at 5-5.5 times this fiscal and the next, vis-à-vis 4.8 times last fiscal, as profits improve marginally. Financial leverage is expected to remain healthy at 0.7 time, similar to last fiscal.”
The evolving global economic situation, the tariff environment and volatility in foreign exchange rates will bear watching. 1The India-UK free trade agreement will be effective from April 2026. The India-European Free Trade Association Trade and Economic Partnership Agreement has been in effect from October 2025. The India-EU and India-US trade deals will come into effect next fiscal. Also, the US has removed the 25% additional tariff, effective February 07, 2026; the overall tariff is expected to reduce to 15% after the US Supreme Court’s ruling on tariffs.